Omnicom (OMC) Beats On Q2 Earnings, Revenues Decline Y/Y
Zacks Investment Research | Jul 19, 2017 10:15PM ET
Global marketing and corporate communications firm Omnicom Group Inc. (NYSE:OMC) reported modest second-quarter 2017 results, with year-over-year increase in earnings on decent organic growth. Net income for the reported quarter was $328.1 million or $1.40 per share compared with $326.1 million or $1.36 per share in the year-ago quarter. GAAP earnings for the reported quarter beat the Zacks Consensus Estimate by a penny.
Revenues
Omnicom's revenues for the quarter were $3,790.1 million compared with $3,884.9 million in second-quarter 2016. Fall in revenues was primarily due to negative foreign exchange rate of 1.5%. Acquisitions, net of dispositions led to a 4.4% decrease in revenues.
Quarterly Performance
By business disciplines, revenues for Advertising were up 4.2% year over year to $2,017.8 million, CRM (customer relationship management) increased 3.7% to $1,131.9 million, PR (public relations) revenues decreased 0.3% to $342.6 million, and Specialty revenues increased 2.2% to $297.8 million.
Across regional markets, North America revenues improved 0.2% to $2,175.6 million. Asia Pacific was $405.3 million, up 7.1% year over year, Euro & Other Europe improved 7.8% to $662.1 million while the U.K. improved 9.3% to $350.4 million. Revenues from Latin America were $121.2 million, up 5% while that of Middle East and Africa improved significantly to $75.5 million by 20.4%.
Operating profit in quarter increased $3.7 million to $565.5 million from $561.8 million in the second quarter of 2016. Operating margin was 14.9% compared with 14.5% for the year ago quarter. EBITA (earnings before interest, taxes, and amortization) increased $3.7 million to $594 million from $590.3 million in the year-ago quarter. EBITA margin increased to 15.7% from 15.2% in the year-earlier period.
Balance Sheet & Cash Flow
Omnicom generated free cash flow of $797.5 million over the six months ended Jun 30, 2017 compared with $763.8 million in the year-ago period.
For the 12 months ended Jun 30, 2017, return on invested capital and return on equity aggregated 19.9% and 51.8%, respectively. During the same period, the company had a total debt of $4,949 million with cash and short-term investments of $1,874 million.
During the period from 2007 through Jun 30, 2017, Omnicom distributed 107% of net income to shareholders through dividends and share repurchases.
Omnicom Group Inc. Price, Consensus and EPS Surprise
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